Next Day Prep #298: Record Close, Cautious Verdict: Why CPI Decides Everything – Friday 8/7/2026

Welcome to WaveRider next day prep. Review today. Prepare tomorrow. Let's dive in. Oh, it's a fun one. Okay, so this morning, we called it cautious at 61% breath. Did that hold into the clothes? It held, and it actually firmed. 61.6% by the bell, up about 0.7 points. So the morning read was right. Right, but here's the thing. Even with a record close, we never crossed the 65% line for a bullish upgrade. Wait, a record close and still just cautious? Yeah, it's like a student who studies all night and still lands just shy of an A. So close. So close. The S&P was up 0.62% to 7757.64, NASDAQ up 1.30. Real strength, but breath didn't fully confirm. And the catalyst was that ugly jobs number. Exactly, payrolls minus 23,000, prior months revised down, and September rate hike odds dropped to 41.9% from 55. Mm-hmm, bad news is good news. Classic rate relief trade, and the bull bear gauge exploded. 399 bulls versus 114 bears. Oh, wow, that's lopsided. Sharply. So the one line verdict? Momentum without full conviction. I like that. Breath expanding, but not over the line yet. You got it. Okay, so breath firmed, but didn't flip the regime. Let's see which signals actually confirmed that strength and which didn't. So the scans lit up. The continuation scan fired 42 signals, Dervis Box 33, D9M 12. And that tells you what exactly? Momentum breath expanded. Thursday's tape was cautious. Friday, participation broadened out fast. Right, and software and semis led. Big time, software up 3.3%, semis up 2.6%. Why those two specifically? Because rate relief hits high multiple growth names directly. Lower rates, higher valuations, it's mechanical. Makes sense. Then, microchip gaped 14% post earnings on nearly two times relative volume. And that volume matters because... Because it's institutional backing. That's not a one-day pop. That's real money committing. Same story with coherent. Up 13.4%, a Dervis breakout on two times volume. And Airbnb? Airbnb was the star, honestly. Up 17.43%, earnings beat plus the rate tailwind. Okay, but here's what I don't get. Trade desk cratered nearly 22% on the same bullish tape. How? See, that's the thing. A rising tide can't lift a boat with a hole in it. Ha, meaning the earnings were the hole. Q2 myths, guidance implied about a 12% revenue decline for Q3. Company-specific bad news overrides macro every time. So macro tailwind versus company catalyst. That's the whole lesson right there. And it wasn't just tech, by the way. Oh. Newmont ran 7.16% riding gold 7.1% weekly surge. Same rate relief story, different sector. Huh, I didn't think of gold that way. And yet, energy fell 1.2% even with crude up 1.2. Not every sector follows the narrative. Good reminder, that's exactly what we need heading into tomorrow. Let's build the game plan. So the watch list, microchip, coherent, rocket lab and newmont. Give me levels. Microchip, I want tight consolidation above that 84.76 earnings gap. Hold there, it's a continuation. And coherent? Entry on a hold above the 379.08 breakout pivot. Rocket lab? Sitting right at monthly demand. Upper edge 82.51, up 9.5% with a 16% fund increase. Risk defined at the base. I love a defined base, newmont. Gold leader. Respect the 99-100 demand shelf. Supply up at 123-131. Okay, so what decides all this? CPI. Next week, it's the whole ball game. Lay out the two scenarios. Cool CPI keeps the Fed on hold. We hold above 7,700. Breath pushes towards 65. That's your bullish upgrade. And the bearish side? Hot CPI or an oil spike revives rate hike fears. We break 7,700. And the regime slides towards cautious bearish. A real binary. Totally. Consumer credit came in hot today too. 14.2 billion versus 9 billion consensus. Another data point feeding the rate debate. Hmm, so how do you size for all this? Two codes, controlled risk taking for defined risk entries at demand basis. And lean into high-volume institutional breakouts. Both hands on the wheel. At record highs in a cautious regime. Always. So here's the takeaway. A soft jobs report bought us a rate relief rally to a record close. But breath still fell short of an upgrade. And next week's CPI, not today's jobs number, decides if this move has legs. Perfectly put. Keep microchip, coherent, rocket lab, and newmont on your watch list with levels defined. Size for the CPI binary and see it tomorrow for the next regime read. That's all for today's episode of Wave Rider Next Day Prep. Review today, prepare tomorrow. See you next time.